Table of Contents





|                                  
|----------------------------------
|UNITED STATES                     
|SECURITIES AND EXCHANGE COMMISSION
|WASHINGTON,
 D.C. 20549           
|                                  
|                                  
|                                  
|FORM 10-Q                         
|                                  
|                                  

|                                                    |   |                                                                                          
|--------------------------------------------------- | - | -----------------------------------------------------------------------------------------
|(Mark One)                                          |  
|                                                    |   |                                                                                          
|                                                    | x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934 
|For the quarterly period ended June 30,
 2010      
|                                                    |   |                                                                                          
|OR                                                 
|                                                    |   |                                                                                          
|                                                    | o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
 SECURITIES EXCHANGE ACT OF 1934
|For the transition period from _______ to
 ________

|                                                       
|-------------------------------------------------------
|Commission File Number: 0-27605                        
|                                                       
|                                                       
|                                                       
|VASCULAR SOLUTIONS, INC.                               
|(Exact name of registrant as specified in
 its charter)

|                                                                |                                  
|--------------------------------------------------------------- | ---------------------------------
|Minnesota                                                       | 41-1859679                       
|(State or other jurisdiction of
 incorporation or organization) | (IRS Employer Identification No.)

|                                                             
|-------------------------------------------------------------
|6464
 Sycamore Court                                         
|Minneapolis,
 Minnesota 55369                                
|(Address of principal executive offices,
 including zip code)
|                                                             
|(763)
 656-4300                                              
|(Registrants telephone number, including
 area code)        
|                                                             
|Not Applicable                                               
|(Former name, former address and former                      
|fiscal year, if changed since last report)                   
|                                                             
|                                                             

Indicate by
check mark whether the registrant: (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. 
Yes x
No o

Indicate by
check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).Yes o No o

|                                                                                                                                                                                                                                                                                                       |                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---------------------------
|Indicate by check mark whether the registrant is a large accelerated
 filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
 company. See the definitions of large accelerated filer, accelerated
 filer and smaller reporting company in Rule 12b-2 of the Exchange Act.
|Large accelerated filer o                                                                                                                                                                                                                                                                              | Accelerated filer x        
|Non-accelerated filer o                                                                                                                                                                                                                                                                                | Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).Yes o No x

The registrant had 16,820,840 shares of common stock, $.01 par value
per share, outstanding as of July 19, 2010.







VASCULAR
SOLUTIONS, INC.

TABLE OF CONTENTS

|                               |          |                                                                                        |  |     
|------------------------------ | -------- | -------------------------------------------------------------------------------------- |  | ----
|                               |          |                                                                                        |  | Page
|                               |          |                                                                                       
|PART I.
 FINANCIAL INFORMATION |          |                                                                                       
|                               |          |                                                                                       
|                               | Item 1.  | Financial Statements (Unaudited)                                                       |  | 2   
|                               |          |                                                                                        |  |     
|                               |          | Consolidated Balance Sheets                                                            |  | 2   
|                               |          |                                                                                        |  |     
|                               |          | Consolidated Statements of Operations                                                  |  | 3   
|                               |          |                                                                                        |  |     
|                               |          | Consolidated Statements of Cash Flows                                                  |  | 4   
|                               |          |                                                                                        |  |     
|                               |          | Notes to Unaudited Consolidated Financial Statements                                   |  | 5   
|                               |          |                                                                                        |  |     
|                               | Item 2.  | Managements Discussion and Analysis of Financial Condition and
 Results of Operations |  | 14  
|                               |          |                                                                                        |  |     
|                               | Item 3.  | Quantitative and Qualitative Disclosures about Market Risk                             |  | 20  
|                               |          |                                                                                        |  |     
|                               | Item 4.  | Controls and Procedures                                                                |  | 21  
|                               |          |                                                                                        |  |     
|PART II. OTHER
 INFORMATION    |          |                                                                                       
|                               |          |                                                                                       
|                               | Item 1.  | Legal Proceedings                                                                      |  | 22  
|                               |          |                                                                                        |  |     
|                               | Item 1A. | Risk Factors                                                                           |  | 22  
|                               |          |                                                                                        |  |     
|                               | Item 2.  | Unregistered Sales of Equity Securities and Use of Proceeds                            |  | 22  
|                               |          |                                                                                        |  |     
|                               | Item 3.  | Defaults upon Senior Securities                                                        |  | 22  
|                               |          |                                                                                        |  |     
|                               | Item 4.  | (Removed and Reserved)                                                                 |  | 23  
|                               |          |                                                                                        |  |     
|                               | Item 5.  | Other Information                                                                      |  | 23  
|                               |          |                                                                                        |  |     
|                               | Item 6.  | Exhibits                                                                               |  | 23  

Page 1

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Table of Contents

PART 1. FINANCIAL INFORMATION

|         |                     
|-------- | --------------------
|Item
 1. | Financial Statements

VASCULAR SOLUTIONS, INC.

Consolidated
Balance Sheets

|                                                                                                     |  |               |             |                   |   |             |  
|---------------------------------------------------------------------------------------------------- |  | ------------- | ----------- | ----------------- | - | ----------- | -
|                                                                                                     |  | June 30, 2010 |             | December 31, 2009 |  
|                                                                                                     |  |               |             |                   |   |             |  
|                                                                                                     |  | (unaudited)   |             | (see note)        |  
|Assets                                                                                               |  |               |             |                   |   |             |  
|Current assets:                                                                                      |  |               |             |                   |   |             |  
|Cash and cash equivalents                                                                            |  | $             | 18,227,000  |                   | $ | 17,794,000  |  
|Accounts receivable, net of reserves of
 $165,000 and $150,000 in 2010 and 2009, respectively        |  |               | 10,232,000  |                   |   | 9,143,000   |  
|Inventories                                                                                          |  |               | 12,306,000  |                   |   | 8,977,000   |  
|Prepaid expenses                                                                                     |  |               | 1,498,000   |                   |   | 1,520,000   |  
|Current portion of deferred tax assets                                                               |  |               | 4,500,000   |                   |   | 4,500,000   |  
|Total current assets                                                                                 |  |               | 46,763,000  |                   |   | 41,934,000  |  
|                                                                                                     |  |               |             |                   |   |             |  
|Property and equipment, net                                                                          |  |               | 4,539,000   |                   |   | 3,793,000   |  
|Intangible assets, net                                                                               |  |               | 5,134,000   |                   |   | 193,000     |  
|Deferred tax assets, net of current portion
 and liabilities                                         |  |               | 3,121,000   |                   |   | 5,835,000   |  
|Total assets                                                                                         |  | $             | 59,557,000  |                   | $ | 51,755,000  |  
|                                                                                                     |  |               |             |                   |   |             |  
|Liabilities and shareholders equity                                                                 |  |               |             |                   |   |             |  
|Current liabilities:                                                                                 |  |               |             |                   |   |             |  
|Accounts payable                                                                                     |  | $             | 3,756,000   |                   | $ | 1,396,000   |  
|Accrued compensation                                                                                 |  |               | 3,116,000   |                   |   | 2,978,000   |  
|Accrued expenses                                                                                     |  |               | 1,054,000   |                   |   | 865,000     |  
|Accrued royalties                                                                                    |  |               | 542,000     |                   |   | 621,000     |  
|Current portion of deferred revenue                                                                  |  |               | 869,000     |                   |   | 929,000     |  
|Total current liabilities                                                                            |  |               | 9,337,000   |                   |   | 6,789,000   |  
|                                                                                                     |  |               |             |                   |   |             |  
|Long-term deferred revenue, net of current
 portion                                                  |  |               | 4,142,000   |                   |   | 4,567,000   |  
|                                                                                                     |  |               |             |                   |   |             |  
|Shareholders equity:                                                                                |  |               |             |                   |   |             |  
|Common stock, $0.01 par value:                                                                       |  |               |             |                   |   |             |  
|Authorized shares  40,000,000 Issued and
 outstanding shares  16,848,340  2010; 16,557,669  2009 |  |               | 168,000     |                   |   | 166,000     |  
|Additional paid-in capital                                                                           |  |               | 89,217,000  |                   |   | 88,481,000  |  
|Other                                                                                                |  |               | 84,000      |                   |   | 84,000      |  
|Accumulated deficit                                                                                  |  |               | (43,391,000 | )                 |   | (48,332,000 | )
|Total shareholders equity                                                                           |  |               | 46,078,000  |                   |   | 40,399,000  |  
|Total liabilities and shareholders equity                                                           |  | $             | 59,557,000  |                   | $ | 51,755,000  |  

See accompanying notes.

Note: The
balance sheet at December 31, 2009 has been derived from the audited financial
statements at that date.

Page 2

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Table of Contents

VASCULAR SOLUTIONS, INC.

Consolidated
Statements of Operations

|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|----------------------------------------------------- |  | ----------------------------- | ---------- | --------------------------- | - | ---------- | - | ---- | ---------- | - | - | ---------- | -
|                                                      |  | Three Months Ended 
 June 30, |            | Six Months Ended 
 June 30, |  
|                                                      |  | 2010                          |            | 2009                        |   | 2010       |   | 2009 |           
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|                                                      |  | (unaudited)                   |            | (unaudited)                 |  
|Revenue:                                              |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Product revenue                                       |  | $                             | 19,262,000 |                             | $ | 16,781,000 |   | $    | 37,129,000 |   | $ | 32,197,000 |  
|License and collaboration revenue                     |  |                               | 254,000    |                             |   | 385,000    |   |      | 576,000    |   |   | 779,000    |  
|Total revenue                                         |  |                               | 19,516,000 |                             |   | 17,166,000 |   |      | 37,705,000 |   |   | 32,976,000 |  
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Product costs and operating expenses:                 |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Cost of goods sold                                    |  |                               | 6,510,000  |                             |   | 5,765,000  |   |      | 12,457,000 |   |   | 10,980,000 |  
|Collaboration expenses                                |  |                               | 42,000     |                             |   | 173,000    |   |      | 152,000    |   |   | 355,000    |  
|Research and development                              |  |                               | 2,266,000  |                             |   | 1,803,000  |   |      | 4,730,000  |   |   | 3,719,000  |  
|Clinical and regulatory                               |  |                               | 888,000    |                             |   | 767,000    |   |      | 1,595,000  |   |   | 1,379,000  |  
|Sales and marketing                                   |  |                               | 5,910,000  |                             |   | 5,307,000  |   |      | 11,513,000 |   |   | 10,560,000 |  
|General and administrative                            |  |                               | 1,405,000  |                             |   | 1,104,000  |   |      | 2,712,000  |   |   | 2,223,000  |  
|Litigation                                            |  |                               |           |                             |   |           |   |      | (3,529,000 | ) |   |           |  
|Amortization of purchased technology and
 intangibles |  |                               | 59,000     |                             |   |           |   |      | 59,000     |   |   |           |  
|Total product costs and operating expenses            |  |                               | 17,080,000 |                             |   | 14,919,000 |   |      | 29,689,000 |   |   | 29,216,000 |  
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Operating income                                      |  |                               | 2,436,000  |                             |   | 2,247,000  |   |      | 8,016,000  |   |   | 3,760,000  |  
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Other income (expenses):                              |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Interest income                                       |  |                               | 10,000     |                             |   | 14,000     |   |      | 20,000     |   |   | 37,000     |  
|Interest expense                                      |  |                               | (5,000     | )                           |   | (11,000    | ) |      | (10,000    | ) |   | (20,000    | )
|Foreign exchange loss                                 |  |                               | (35,000    | )                           |   | 7,000      |   |      | (58,000    | ) |   | (5,000     | )
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Income before income taxes                            |  |                               | 2,406,000  |                             |   | 2,257,000  |   |      | 7,968,000  |   |   | 3,772,000  |  
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Income tax expense                                    |  |                               | (931,000   | )                           |   | (871,000   | ) |      | (3,027,000 | ) |   | (1,448,000 | )
|Net income                                            |  | $                             | 1,475,000  |                             | $ | 1,386,000  |   | $    | 4,941,000  |   | $ | 2,324,000  |  
|                                                      |  |                               |            |                             |   |            |   |      |            |   |   |            |  
|Net income per share  basic                          |  | $                             | 0.09       |                             | $ | 0.09       |   | $    | 0.30       |   | $ | 0.15       |  
|Net income per share  diluted                        |  | $                             | 0.09       |                             | $ | 0.09       |   | $    | 0.29       |   | $ | 0.14       |  

See accompanying notes.

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Table of Contents

VASCULAR SOLUTIONS, INC.

Consolidated
Statements of Cash Flows

|                                                                                                |  |                             |            |      |   |            |  
|----------------------------------------------------------------------------------------------- |  | --------------------------- | ---------- | ---- | - | ---------- | -
|                                                                                                |  | Six Months Ended 
 June 30, |           
|                                                                                                |  | 2010                        |            | 2009 |  
|                                                                                                |  |                             |            |      |   |            |  
|                                                                                                |  | (unaudited)                 |           
|Operating activities                                                                            |  |                             |            |      |   |            |  
|Net income                                                                                      |  | $                           | 4,941,000  |      | $ | 2,324,000  |  
|Adjustments to reconcile net income to net
 cash provided by operating activities:              |  |                             |            |      |   |            |  
|Depreciation                                                                                    |  |                             | 800,000    |      |   | 684,000    |  
|Amortization                                                                                    |  |                             | 59,000     |      |   |           |  
|Stock-based compensation                                                                        |  |                             | 1,009,000  |      |   | 891,000    |  
|Deferred taxes, net                                                                             |  |                             | 2,714,000  |      |   | 1,338,000  |  
|Change in allowance for doubtful accounts                                                       |  |                             | 15,000     |      |   | (10,000    | )
|Changes in operating assets and
 liabilities:                                                   |  |                             |            |      |   |            |  
|Accounts receivable                                                                             |  |                             | (1,104,000 | )    |   | 161,000    |  
|Inventories                                                                                     |  |                             | (3,329,000 | )    |   | 110,000    |  
|Prepaid expenses                                                                                |  |                             | 22,000     |      |   | (338,000   | )
|Accounts payable                                                                                |  |                             | 2,360,000  |      |   | (1,069,000 | )
|Accrued compensation and expenses                                                               |  |                             | 8,000      |      |   | 129,000    |  
|Amortization of deferred license fees and
 other deferred revenue                               |  |                             | (485,000   | )    |   | (412,000   | )
|Net cash provided by operating activities                                                       |  |                             | 7,010,000  |      |   | 3,808,000  |  
|                                                                                                |  |                             |            |      |   |            |  
|Investing activities                                                                            |  |                             |            |      |   |            |  
|Purchase of property and equipment                                                              |  |                             | (1,307,000 | )    |   | (539,000   | )
|Cash paid for acquisition                                                                       |  |                             | (5,000,000 | )    |   |           |  
|Net cash used in investing activities                                                           |  |                             | (6,307,000 | )    |   | (539,000   | )
|                                                                                                |  |                             |            |      |   |            |  
|Financing activities                                                                            |  |                             |            |      |   |            |  
|Repurchase of common shares                                                                     |  |                             | (727,000   | )    |   | (333,000   | )
|Proceeds from the exercise of stock
 options, stock warrants and sale of stock, net of expenses |  |                             | 457,000    |      |   | 377,000    |  
|Net cash provided by (used in) financing
 activities                                            |  |                             | (270,000   | )    |   | 44,000     |  
|Increase in cash and cash equivalents                                                           |  |                             | 433,000    |      |   | 3,313,000  |  
|Cash and cash equivalents at beginning of
 period                                               |  |                             | 17,794,000 |      |   | 7,209,000  |  
|Cash and cash equivalents at end of period                                                      |  | $                           | 18,227,000 |      |   | 10,522,000 |  
|                                                                                                |  |                             |            |      |   |            |  
|Supplemental disclosure of cash flow                                                            |  |                             |            |      |   |            |  
|Cash paid for interest                                                                          |  | $                           | 7,000      |      | $ | 14,000     |  
|Cash paid for taxes                                                                             |  | $                           | 100,000    |      | $ | 107,000    |  

See accompanying notes.

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial
Statements-Continued

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Basis of Presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The
 accompanying unaudited financial statements of Vascular Solutions, Inc. (the
 Company) have been prepared in accordance with generally accepted accounting
 principles for interim financial information and with the instructions to
 Form 10-Q and Regulation S-X. Accordingly, they do not include all of the
 information and footnotes required by generally accepted accounting
 principles for complete financial statements. In the opinion of management,
 all normal, recurring adjustments considered necessary for a fair
 presentation have been included. The financial statements should be read in
 conjunction with the audited financial statements for the fiscal year ended
 December 31, 2009 included in the Annual Report on Form 10-K of the Company
 filed with the Securities and Exchange Commission. Interim results of
 operations are not necessarily indicative of the results to be expected for
 the full year or any other interim periods.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|(2) | Net Income per Share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In
 accordance with Accounting Standards Codification (ASC) 260-10-55, basic
 net income per share for the three and six months ended June 30, 2010 and
 2009 is computed by dividing net income by the weighted average common shares
 outstanding during the periods presented. Diluted net income per weighted
 average common share is computed by dividing net income by the weighted
 average common shares outstanding during the period, increased to include
 dilutive potential common shares issuable relating to outstanding restricted
 stock, and upon the exercise of stock options and awards that were
 outstanding during the period.                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Weighted
 average common shares outstanding for the three and six months ended June 30,
 2010 and 2009 was as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|                                               |  |                              |            |                             |  |            |  |      |            |  |  |            | 
|---------------------------------------------- |  | ---------------------------- | ---------- | --------------------------- |  | ---------- |  | ---- | ---------- |  |  | ---------- | 
|                                               |  | Three Months Ended
 June 30, |            | Six Months Ended 
 June 30, | 
|                                               |  | 2010                         |            | 2009                        |  | 2010       |  | 2009 |           
|                                              
|                                               |  | (unaudited)                  |            | (unaudited)                 | 
|Weighted
 average shares outstanding  basic   |  |                              | 16,396,000 |                             |  | 15,903,000 |  |      | 16,358,000 |  |  | 15,871,000 | 
|Weighted
 average shares outstanding  diluted |  |                              | 16,958,000 |                             |  | 16,207,000 |  |      | 16,847,000 |  |  | 16,202,000 | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | Revenue Recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In the
 United States the Company sells its products directly to hospitals and
 clinics. Revenue is recognized in accordance with generally accepted
 accounting principles as outlined in ASC 605-10-S99, which requires that four
 basic criteria be met before revenue can be recognized: (i) persuasive
 evidence of an arrangement exists; (ii) the price is fixed or determinable;
 (iii) collectibility is reasonably assured; and (iv) product delivery has
 occurred or services have been rendered. The Company recognizes revenue as
 products are shipped based on FOB shipping point terms when title passes to
 customers. The Company negotiates credit terms on a customer-by-customer
 basis and products are shipped at an agreed-upon price. All product returns
 must be pre-approved and, if approved, customers are subject to a 20%
 restocking charge.

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | In all
 international markets, the Company sells its products to international
 distributors which subsequently resell the products to hospitals and clinics.
 The Company has agreements with each of its distributors which provide that
 title and risk of loss pass to the distributor upon shipment of the products
 to the distributor. The Company warrants that its products are free from
 manufacturing defects at the time of shipment to the distributor. Revenue is
 recognized upon shipment of products to distributors following the receipt
 and acceptance of a distributors purchase order. Allowances are provided for
 estimated returns and warranty costs at the time of shipment.                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company
 also generates revenues from license agreements and research collaborations
 and recognizes these revenues when earned. In accordance with ASC
 605-25-25-5, for revenues which contain multiple deliverables, the Company
 separates the deliverables into separate accounting units if they meet the
 following criteria: (i) the delivered items have a stand-alone value to the
 customer; (ii) the fair value of any undelivered items can be reliably
 determined; and (iii) if the arrangement includes a general right of return,
 delivery of the undelivered items is probable and substantially controlled by
 the seller. Deliverables that do not meet these criteria are combined with
 one or more other deliverables into one accounting unit. Revenue from each
 accounting unit is recognized based on the applicable accounting literature,
 primarily ASC 605-10-S99-1.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | In addition,
 the Company has reviewed the provisions of ASC 808-10 for Collaborative
 Arrangements, and has determined this ASC has no impact on the amounts
 recorded under these agreements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | In
 accordance with ASC 605-45-45, the Company includes shipping and handling
 revenues in net revenue, and shipping and handling costs in cost of sales.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(4) | Inventories                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Inventories
 are stated at the lower of cost (first-in, first-out method) or market.
 Appropriate consideration is given to deterioration, obsolescence and other
 factors in evaluating net realizable value. Inventories are comprised of the
 following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

|                 |  |                |            |                    |   |           | 
|---------------- |  | -------------- | ---------- | ------------------ | - | --------- | 
|                 |  | June 30,
 2010 |            | December 31,
 2009 |  
|                
|                 |  | (unaudited)    |            |                    |  
|                 |  |                |            |                    |   |           | 
|Raw
 materials   |  | $              | 5,485,000  |                    | $ | 4,382,000 | 
|Work-in
 process |  |                | 1,341,000  |                    |   | 858,000   | 
|Finished
 goods  |  |                | 5,480,000  |                    |   | 3,737,000 | 
|                 |  | $              | 12,306,000 |                    | $ | 8,977,000 | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(5) | Credit Risk and Allowance for Doubtful Accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    | The Company
 maintains allowances for doubtful accounts for estimated losses resulting
 from the inability of our customers to make required payments. This allowance
 is regularly evaluated by the Company for adequacy by taking into
 consideration factors such as past experience, credit quality of the customer
 base, age of the receivable balances, both individually and in the aggregate,
 and current economic conditions that may affect a customers ability to pay.
 The Company does not accrue interest on past due accounts receivable. Receivables
 are written off only after all collection attempts have failed and are based
 on individual credit evaluation and the specific circumstances of the
 customer. At June 30, 2010 and December 31, 2009, the allowance for doubtful
 accounts was $130,000 and $105,000, respectively.

Page 6

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    | All product
 returns must be pre-approved and, if approved, customers are subject to a 20%
 restocking charge. The Company analyzes the rate of historical returns when
 evaluating the adequacy of the allowance for sales returns, which is included
 with the allowance for doubtful accounts on our balance sheet. At June 30,
 2010 and December 31, 2009, the sales and return allowance was $35,000 and
 $45,000, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Accounts
 receivable are shown net of the combined total of the allowance for doubtful
 accounts and allowance for sales returns of $165,000 and $150,000 at June 30,
 2010 and December 31, 2009, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(6) | Concentrations of Credit and Other Risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | In the
 United States the Company sells its products directly to hospitals and
 clinics. In all international markets, the Company sells its products to
 distributors who, in turn, sell to medical clinics.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | With respect
 to accounts receivable, the Company performs credit evaluations of its
 customers and does not require collateral. No single customer represented
 greater than 10% of gross accounts receivable as of either June 30, 2010 or
 December 31, 2009. There have been no material losses on customer
 receivables.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | Revenue by
 geographic destination as a percentage of total net revenue for the six month
 periods ended June 30, 2010 and 2009 was 86% and 87% in the United States and
 14% and 13% in international markets, respectively. No single customer
 represented greater than 10% of the total net revenue for the six months
 ended June 30, 2010 or 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(7) | Dependence on Key Suppliers                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | King Pharmaceuticals                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    | The Company
 purchases certain key components from single-source suppliers. Any
 significant component delay or interruption could require the Company to
 qualify new sources of supply, if available, and could have a material
 adverse effect on the Companys financial condition and results of operations.
 The Company purchases its requirements for thrombin (a component in the
 Hemostat products) under a Thrombin-JMI Supply Agreement entered into with
 King Pharmaceuticals, Inc. (King) on January 9, 2007. Under the terms of
 the Thrombin-JMI Supply Agreement, King agrees to manufacture and supply
 thrombin to the Company on a non-exclusive basis. The Thrombin-JMI Supply
 Agreement does not contain any minimum purchase requirements. King agrees to
 supply the Company with such quantity of thrombin as the Company may order at
 a fixed price throughout the term of the Thrombin-JMI Supply Agreement as
 adjusted for inflation, variations in potency and other factors. The
 Thrombin-JMI Supply Agreement has an initial term of 10 years, followed by
 successive automatic one-year extensions, subject to termination by the
 parties under certain circumstances, including: (i) termination by King
 without cause anytime after the fifth anniversary of the date of the
 Thrombin-JMI Supply Agreement upon five years prior written notice to the
 Company, and (ii) termination by the Company without cause anytime after the
 fifth anniversary of the date of the Thrombin-JMI Supply Agreement upon five
 years prior written notice to King provided that the Device Supply Agreement,
 which the Company also entered into with King on January 9, 2007, has expired
 on its terms or the parties have agreed to terminate it.

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(8) | Commitments and Contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Marine Polymer Technologies, Inc. Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | On May 11,
 2005 the Company initiated a lawsuit for product disparagement and false
 advertising against Marine Polymer Technologies, Inc., a Delaware corporation
 (Marine Polymer). In the lawsuit, the Company alleged that Marine Polymer
 made defamatory and disparaging statements concerning the Companys D-Stat®
 Dry hemostatic bandage. The Company sought relief in the form of an
 injunction to enjoin Marine Polymer from continuing to defame and disparage the
 Companys products, damages as a result of such statements, and other costs,
 disbursements and attorneys fees. Marine Polymer brought a counter-claim
 against the Company including, among other claims, business defamation and
 product disparagement for statements allegedly made by the Company concerning
 Marine Polymers SyvekPatch®. Marine Polymer sought relief in the
 form of monetary damages, costs, disbursements and attorneys fees. The trial
 commenced on March 24, 2008 in the United States District Court for the
 District of Massachusetts. At the conclusion of the trial on April 7, 2008
 the jury returned a verdict in favor of the Company and against Marine
 Polymer for product disparagement concerning statements made regarding the
 safety of the Companys D-Stat Dry hemostat product. In its verdict, the jury
 found that Marine Polymers statements were false and disparaged the D-Stat
 Dry product and awarded the Company $4,500,000 in monetary damages. The jury
 rejected Marine Polymers counter-claims in their entirety. Following post
 trial motions, on June 30, 2008, the Court upheld the jury verdict, granted
 the Companys request for a permanent injunction against Marine Polymer for
 the statements that the jury found were false, and added prejudgment interest
 on the jury verdict award in the amount of $592,124.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | On July 14,
 2008, Marine Polymer filed a Notice of Appeal with the U.S. First Circuit
 Court of Appeals seeking to overturn the monetary damages and injunction
 issued against them. Marine Polymer did not appeal the Courts rejection of
 its counter-claims against the Company. On February 4, 2009, oral arguments
 by both parties on Marine Polymers appeal were heard by the U.S. First
 Circuit Court of Appeals. On December 23, 2009, the U.S. First Circuit Court
 of Appeals affirmed the judgment against Marine Polymer for product
 disparagement. As a result, the permanent injunction issued at the conclusion
 of the trial will remain in effect, prohibiting Marine Polymer and its
 representatives from making, publishing or disseminating certain disparaging
 statements concerning the safety of our D-Stat products. Addressing the
 jurys award of $4.5 million in damages, the Court determined that, due to
 differences in opinion among the judges, the Company could either accept a
 $2.7 million award of damages (plus interest) or insist upon a new trial
 limited to the issue of determining the reasonable amount of damages. The
 Company accepted the $2.7 million award of damages plus interest and on
 January 22, 2010 the Company received $3.56 million as payment in full for
 the judgment. This amount was recorded as a litigation gain in the first
 quarter of 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                   

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | AngioDynamics, Inc. Litigation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | On July 29,
 2009 AngioDynamics, Inc. (AngioDynamics) filed a lawsuit against the Company
 in the U.S. District Court for the District of Delaware, alleging that the
 Company has infringed U.S. Patent No. 7,273,478 and U.S. Patent No. 7,559,329.
 Specifically, AngioDynamics alleges that doctors using the Companys Bright
 Tip fibers and procedure kits are using the methods claimed in those patents,
 and accuses the Company of inducing and contributing to infringement.
 AngioDynamics has requested injunctive relief and compensatory damages. On
 December 1, 2009 the
 Company filed its answer, a counterclaim, and a motion to transfer the case
 to the U.S. District Court for the District of Minnesota.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | The Company
 has also filed an inter partes
 request for reexamination of both the 478 and 329 patents with the United
 States Patent Office. The Patent Office granted the inter partes requests for reexamination
 for both the 478 and 329 patents. The Company expects the reexamination
 process for each patent will take at least three years to conclude. On
 January 27, 2010, the Company filed a motion with the U.S. District Court for
 the District of Delaware to stay all proceedings in the litigation pending
 the outcome of the inter partes
 reexaminations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | From time to
 time, the Company is involved in additional legal proceedings arising in the
 normal course of business. As of the date of this report the Company is not a
 party to any legal proceeding not described in this section in which an adverse
 outcome would reasonably be expected to have a material adverse effect on the
 Companys results of operations or financial condition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | King Agreements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | On January
 9, 2007, the Company entered into three separate agreements with King: a License
 Agreement, a Device Supply Agreement and a Thrombin-JMI® Supply
 Agreement. Under the License Agreement, the Company licensed the exclusive
 rights to the Companys products Thrombi-Pad, Thrombi-Gel and Thrombi-Paste
 to King in exchange for a one-time license fee of $6,000,000. Under the
 Device Supply Agreement, the Company agreed to manufacture the licensed
 products for sale to King in exchange for two separate $1,000,000 milestone
 payments; one upon the first commercial sale of Thrombi-Gel (which was received
 on May 31, 2007), and one upon the first commercial sale of Thrombi-Paste.
 The Company is amortizing the $6,000,000 license fee on a straight-line basis
 over 10 years. The Company is amortizing the $1,000,000 milestone payment
 that was received on May 31, 2007 over the remaining 10-year license period,
 and will amortize the additional $1,000,000 milestone payment for the
 Thrombi-Paste product over the remaining 10-year license period if it is
 received. The unamortized license fee was $4,593,000 and $4,945,000 at June
 30, 2010 and December 31, 2009, respectively. The amortization of license fee
 was $352,000 for the six months ended June 30, 2010 and 2009, respectively.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | Under the
 Device Supply Agreement the Company agreed to pursue a surgical indication
 for the use of the Thrombi-Gel and Thrombi-Paste products from the FDA. The
 Device Supply Agreement requires the Company to make a one-time payment of
 $2,500,000 to King if the FDA does not approve the surgical indication of
 Thrombi-Gel and a one-time payment of $2,500,000 to King if the FDA does not
 approve the surgical indication of Thrombi-Paste after performing a clinical
 study and submitting the application. The Company continues to pursue a
 surgical indication for the use of the Thrombi-Gel product. In 2009 King
 suspended further development of the Thrombi-Paste product. The Company
 believes the probability of paying these one-time payments to King is remote,
 and therefore has not recorded any provision for these payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Nicolai, GmbH Agreement                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | Effective
 April 1, 2008 the Company entered into a five-year distribution agreement
 with Nicolai, GmbH. As a result of entering into this distribution agreement,
 the Company no longer maintains a direct sales force in Germany. In
 connection with this distribution agreement, the Company received 500,000
 Euros from Nicolai, GmbH, which was deferred and is being recognized ratably
 over the five-year term of the distribution agreement.                                                                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | The
 agreement also includes provisions requiring the Company to pay Nicolai, GmbH
 specific amounts if the Company terminates the distribution agreement prior
 to the end of the five-year term. The Company does not intend to terminate
 the distribution agreement and, as such, has not recorded a liability
 relating to these potential future payments to Nicolai, GmbH. The unamortized
 license fee was $400,000 and $472,000 at June 30, 2010 and December 31, 2009,
 respectively. The amortization of license fee was $72,000 for the six months
 ended June 30, 2010 and 2009, respectively.                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(9)  | Lines of Credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | On December
 21, 2009, the Company entered into a secured asset-based revolving credit
 agreement with U.S. Bank National Association. The revolving credit agreement
 is a one-year, $10,000,000 facility with availability based primarily on
 eligible customer receivables, inventory and property and equipment. The
 revolving credit agreement bears interest equal to the one-month LIBOR rate
 plus 1.60% and is secured by a first security interest on all of the
 Companys assets. The revolving credit agreement requires a quarterly payment
 based on an annual fee of 0.125% of the average unused portion of the
 committed revolving line as determined by the bank and reviewed by
 management.
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | The
 revolving credit agreement includes one covenant that the Company cannot have
 a maximum cash flow leverage ratio greater than 2.5 to 1. The calculation of
 this covenant is determined by multiplying annual lease expense times six and
 adding any loans, then dividing this amount by the sum of earnings before
 interest, taxes, depreciation, amortization and annual operating lease
 payments. The covenant is computed quarterly based on a rolling 12-month
 period. The Company was in compliance with this covenant as of June 30, 2010.                                                                                                                                                        
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | As of June
 30, 2010, the Company had no outstanding balance against the revolving credit
 agreement. Based on the Companys eligible customer receivables, inventory, property
 and equipment and cash balances, $10,000,000 was available for borrowing as
 of June 30, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|(10) | Income Taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     | The Company
 is subject to income tax in numerous jurisdictions and at various rates and
 the use of estimates is required in determining the provision for income
 taxes. For the six month periods ended June 30, 2010 and June 30, 2009, the
 Company recorded a provision for taxes of $3,027,000 and $1,448,000 on income
 before tax of $7,968,000 and $3,772,000, resulting in an effective income tax
 rate of 38%. The difference between the effective tax rate of 38% and the
 U.S. federal statutory income tax rate of 34% was due mainly to the impact of
 state income taxes.                                                                                                                       

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Table of Contents

VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     | Through the
 third quarter of 2008, the Company maintained a full valuation allowance on
 its deferred tax assets. The Company regularly assesses the likelihood that
 the deferred tax assets will be recovered from future taxable income. The
 Company considers projected future taxable income and ongoing tax planning
 strategies, then records a valuation allowance to reduce the carrying value
 of the net deferred taxes to an amount that is more likely than not to be
 realized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | As of
 December 31, 2008, based upon the Companys assessment of all available
 evidence, including previous three year cumulative income before unusual and
 infrequent expenses (litigation and thrombin qualification expenses),
 estimates of future profitability, and the Companys overall prospects of
 future business, the Company determined that it is more likely than not that
 the Company will be able to realize a portion of the deferred tax assets in
 the future, and as a result recorded a $13,200,000 income tax benefit for the
 year ended December 31, 2008. To determine the amount of the reduction in the
 valuation allowance, the Company used a discounted projection of its revenue
 and income over the next five years, which would approximate the ten-year
 life of the Companys three most significant products as of December 31,
 2008. The amount of the valuation allowance reduction was based on the
 Companys projected discounted taxable income. The Company will continue to
 assess the potential realization of deferred tax assets on an annual basis,
 or an interim basis if circumstances warrant. If the Companys actual results
 and updated projections vary significantly from the projections used as a
 basis for this determination, the Company may need to increase or decrease
 the valuation allowance against the gross deferred tax assets. The Company
 would adjust earnings for the deferred tax in the period the determination
 was made.                      
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | Effective
 January 1, 2007, the Company adopted ASC 740-10. Upon adoption, the Company
 had $425,000 of unrecognized income tax benefits and the adoption of ASC
 740-10 had no effect on shareholders equity. The Company has recorded an ASC
 740-10 reserve of $727,000 as of December 31, 2009. The impact of tax related
 interest and penalties is recorded as a component of income tax expense. For
 the six months ended June 30, 2010, the Company has recorded $0 for the
 payment of tax related interest and there were no tax penalties or interest
 recognized in the statements of operations.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | The Company
 is subject to income tax examinations in the U.S. Federal jurisdiction, as
 well as in Germany and various state jurisdictions. At June 30, 2010, the
 Company was not under examination by any of these taxing authorities and the
 open tax years are 2007 through 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|(11) | Acquisitions and IPR&D Charges                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|     | During the
 first quarter of fiscal year 2010, the Company adopted ASC 805 related to
 business combinations. The new authoritative guidance establishes principles
 and requirements for how an acquirer recognizes and measures in its financial
 statements the identifiable assets acquired, the liabilities assumed, any
 noncontrolling interests in the acquiree and the goodwill acquired. The
 underlying purchase method of accounting for acquisitions was retained, but
 the new guidance incorporates a number of changes. These changes include the
 capitalization of purchased in-process research and development (IPR&D),
 expensing of acquisition related costs and the recognition of contingent
 purchase price consideration at fair value at the acquisition date. In
 addition, changes in accounting for deferred tax asset valuation allowances
 and acquired income tax uncertainties after the measurement period will be
 recognized in earnings rather than as an adjustment to the cost of the
 acquisition. This accounting treatment for taxes is applicable to
 acquisitions consummated both prior to and subsequent to the adoption of the
 new authoritative guidance. The adoption of the new authoritative guidance
 did not change the requirement to expense IPR&D immediately with respect
 to asset acquisitions. The adoption of the new authoritative guidance did not
 have a material impact on our consolidated financial statements during the
 three and six months ended June 30, 2010.

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VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | When the
 Company acquires another company or a group of assets, the purchase price is
 allocated, as applicable, among IPR&D, other identifiable intangible
 assets, net tangible assets and the remainder, if any, gets recognized to
 goodwill, as required by U.S. GAAP. Goodwill represents the excess of the
 aggregate purchase price over the fair value of net assets, including
 IPR&D, of acquired businesses. The values assigned to IPR&D and other
 identifiable intangible assets are based on valuations as determined by
 independent third party appraisers. The techniques used by these appraisers
 include estimating the future cash flows of each project or technology and
 discounting the net cash flows back to their present values utilizing an
 appropriate risk-adjusted rate of return (discount rate). The discount rate
 used is determined at the time of the acquisition in accordance with accepted
 valuation methods. For IPR&D, these methodologies include consideration
 of the risk of the project not achieving commercial feasibility and include a
 factor that takes into account the uncertainty surrounding the successful
 development of the IPR&D.
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | At the time
 of acquisition, the Company plans that all acquired IPR&D will reach
 technological feasibility, but there can be no assurance that the commercial
 viability of these products will actually be achieved. The nature of the
 efforts to develop the acquired technologies into commercially viable
 products consists principally of planning, designing and conducting clinical
 trials necessary to obtain regulatory approvals. The risks associated with
 achieving commercialization include, but are not limited to, delay or failure
 to obtain regulatory approvals to conduct clinical trials, delay or failure
 to obtain required market clearances, and patent issuance, validity and
 litigation, if any. If commercial viability were not achieved, the Company
 would likely look to other alternative uses for the same technology.                                                                                                                                                                                                                                                                                                                                     
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | Escalon Vascular Access, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | On April 30,
 2010, the Company acquired the assets related to the SMARTNEEDLE® and pdACCESS®
 Doppler guided needle access business from Escalon Vascular Access, Inc.,
 (Escalon) a division of Escalon Medical Corporation. Under the terms of the
 agreement the Company will pay Escalon a total of $5,750,000, consisting of
 $5,000,000 paid in cash at April 30, 2010 and $750,000 payable in cash upon
 successful completion of the transfer of the manufacturing processes from
 Escalon to the Company. The SMARTNEEDLE
 and pdACCESS products consist of a hand-held monitor and one-time use needles
 designed to provide auditory ultrasound guided access to arteries and veins
 during catheterization procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | In addition
 to the SMARTNEEDLE and pdACCESS
 products, the Company has acquired the assets related to the new VascuView
 TAP visual ultrasound system and will pay Escalon a one-time cash earn-out
 payment in an amount equal to 25% of the net sales of the VascuView TAP
 products sold between July 1, 2010 and June 30, 2011.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | The Company
 accounted for the transaction as a purchase of assets and technology in the
 second quarter of 2010. In accordance with ASC 805 the purchase price is
 being allocated based on estimates of the fair value of assets acquired, as
 no liabilities were assumed.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

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VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

| |                                                  
| | -------------------------------------------------
| | The purchase
 price will be allocated as follows:

|                        |  |   |           | 
|----------------------- |  | - | --------- | 
|Inventory               |  | $ | 500,000   | 
|Property and
 Equipment |  |   | 250,000   | 
|Purchased
 technology   |  |   | 2,500,000 | 
|Other
 intangibles      |  |   | 750,000   | 
|Goodwill                |  |   | 1,750,000 | 
|                        |  | $ | 5,750,000 | 

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The
 developed technology and other intangible assets have an estimated useful
 life of 9  10 years. The establishment of goodwill was primarily due to the
 expected revenue growth that is attributable to increased market penetration
 from future customers.                                                                                                                                                                                                                                                                                                                                                               
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | Pro Forma
 Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | The
 following unaudited pro forma summary combines the Companys results with
 those of Escalon as if the acquisition had occurred at the beginning of each
 of the periods presented. This unaudited pro forma information is not
 intended to represent or be indicative of the Companys consolidated results
 of operations or financial condition that would have been reported for the
 periods presented had the acquisition been completed at the beginning of each
 of the periods presented, and should not be taken as indicative of the
 Companys future consolidated results of operations or financial condition:

|                     |  |                               |            |                             |   |            |  |      |            |  |   |            | 
|-------------------- |  | ----------------------------- | ---------- | --------------------------- | - | ---------- |  | ---- | ---------- |  | - | ---------- | 
|                     |  | Three Months 
 Ended June 30, |            | Six Months 
 Ended June 30, |  
|                     |  | 2010                          |            | 2009                        |   | 2010       |  | 2009 |           
|                     |  |                               |            |                             |   |            |  |      |            |  |   |            | 
|Revenue              |  | $                             | 19,836,000 |                             | $ | 18,126,000 |  | $    | 39,084,000 |  | $ | 34,948,000 | 
|Net Income           |  |                               | 1,552,000  |                             |   | 1,457,000  |  |      | 5,061,000  |  |   | 2,446,000  | 
|Net income per share |  |                               |            |                             |   |            |  |      |            |  |   |            | 
|Basic                |  | $                             | 0.09       |                             | $ | 0.09       |  | $    | 0.31       |  | $ | 0.15       | 
|Diluted              |  | $                             | 0.09       |                             | $ | 0.09       |  | $    | 0.30       |  | $ | 0.15       | 

| |                                                                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Certain pro
 forma adjustments have been made to reflect the impact of the purchase
 transaction, primarily consisting amortization of intangible assets with
 determinable lives and income taxes to reflect the Companys effective tax
 rate for the periods presented.

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VASCULAR SOLUTIONS, INC. 
Notes to Unaudited Consolidated Financial Statements-Continued

|     |                                                                                                                                                 
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------
|(12) | Products and Services                                                                                                                           
|     |                                                                                                                                                 
|     | The
 following tables set forth, for the periods indicated, net revenue by product
 line along with the percent change from the previous period:

|                          |  |                           |            |                  |  |               |    |                  |            |  |  |    |  
|------------------------- |  | ------------------------- | ---------- | ---------------- |  | ------------- | -- | ---------------- | ---------- |  |  | -- | -
|                          |  | Six Months Ended June 30, |           
|                          |  | 2010                      |            | 2009             | 
|                          |  | Net 
 Revenue             |            | Percent 
 Change |  | Net 
 Revenue |    | Percent 
 Change |           
|                          |  |                           |            |                  |  |               |    |                  |            |  |  |    |  
|Catheter products         |  | $                         | 19,203,000 |                  |  | 31            | %  | $                | 14,649,000 |  |  | 24 | %
|Hemostat products         |  |                           | 12,608,000 |                  |  | 2             | %  |                  | 12,301,000 |  |  | 3  | %
|Vein products             |  |                           | 5,318,000  |                  |  | 1             | %  |                  | 5,247,000  |  |  | 14 | %
|Total product revenue     |  | $                         | 37,129,000 |                  |  | 15            | %  | $                | 32,197,000 |  |  | 13 | %
|License and collaboration |  |                           | 576,000    |                  |  | (26           | %) |                  | 779,000    |  |  | 5  | %
|Total revenue             |  | $                         | 37,705,000 |                  |  | 14            | %  | $                | 32,976,000 |  |  | 12 | %

|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|Item 2. | Managements Discussion and
 Analysis of Financial Condition and Results of Operations

Executive Level Overview

Vascular
Solutions, Inc. (we, us or Vascular) is focused on bringing clinically advanced
solutions to interventional cardiologists and interventional radiologists
worldwide. As a vertically-integrated medical device company, we generate ideas,
create new interventional medical devices, and then deliver these products to
physicians through our direct domestic sales force and our international
distribution network. We were incorporated in the state of Minnesota in
December 1996, and began operations in February 1997. Our products are divided
into three categories:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Catheter
 products, principally consisting of a variety of catheters used in specific
 clinical indications such as the Pronto® extraction catheters,
 Langston® dual lumen catheters and Minnie® support
 catheters, and also including products used in connection with percutaneous
 access to the vasculature such as micro-introudcer kits, guidewires and the
 Guardian® hemostasis valve,
| |   |                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Hemostat
 (blood clotting) products, principally consisting of the D-Stat®
 Dry hemostat, a topical thrombin-based pad with a bandage used to control
 surface bleeding, and the D-Stat Flowable, a thick yet flowable
 thrombin-based mixture for preventing bleeding in subcutaneous pockets, and                                                                                             
| |   |                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | Vein
 products, principally consisting of the Vari-Lase® endovenous
 laser, a laser console and procedure kit used for the treatment of varicose
 veins,                                                                                                                                                                                                                                        

In
2000 we received FDA clearance for our first product, the Duett sealing
device, which is used to seal the puncture site following catheterization
procedures. In 2001, we made the strategic decision to develop additional
products. We have grown from net revenue of $6.2 million in 2000 to net revenue
of $68.4 million in 2009. This increase in revenue represents a compound annual
growth rate of 31% and is driven by our commitment to the research and
development of multiple new devices to diagnose and treat existing and new
vascular conditions.

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The
interventional medical device industry is characterized by intense competition,
rapidly-evolving technology, and a high degree of government regulation. To
grow our business, we have focused on continually developing and
commercializing new products. Looking ahead, we expect our business may be
impacted by the following trends and opportunities:

| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The future
 regulatory approval of newly-developed products. Any new products that we
 develop must be approved by the Food and Drug Administration in the United
 States and by similar regulatory bodies in other countries before they can be
 sold. The requirements for obtaining product approval have undergone change
 and are likely to continue to change. We monitor the changing regulatory
 landscape and modify our regulatory submissions as necessary to obtain
 product approvals.                                                                                                                                                                      
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | Successfully
 integrating acquired products into our existing operations. The acquisition
 of products complementary to our existing product portfolio and customer call
 point provides an additional business opportunity, provided that we
 successfully integrate the acquired products into our existing business
 structure. As a first step in this process, in April 2010 we acquired the SMARTNEEDLE and pdACCESS Doppler guided
 needle products from Escalon (see Note 11 to the Unaudited Consolidated
 Financial Statements in Item 1 of Part I) and have recently begun to
 integrate these products into our operations.                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |  | Managing
 intellectual property. The interventional medical device industry is
 characterized by numerous patent filings and litigation claims made to
 protect new and evolving product ideas. To maximize the profitability of new
 product ideas, we seek patent protection for those product design and method
 concepts which we believe have the potential to provide substantial product
 revenue. We are involved in litigation with AngioDynamics, Inc., concerning
 our Vari-Lase product line (See Legal Proceedings In Item 1 of Part II of
 this Form 10-Q). Managing intellectual property assets and claims is an
 important challenge for our business.

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Results of Operations

The
following table sets forth, for the periods indicated, certain items from our
statements of operations expressed as a percentage of net revenue:

|                                                     |  |                              |     |                            |  |      |   |      |     |    |  |     |  
|---------------------------------------------------- |  | ---------------------------- | --- | -------------------------- |  | ---- | - | ---- | --- | -- |  | --- | -
|                                                     |  | Three Months Ended
 June 30, |     | Six Months Ended
 June 30, | 
|                                                     |  | 2010                         |     | 2009                       |  | 2010 |   | 2009 |    
|Revenue:                                             |  |                              |     |                            |  |      |   |      |     |    |  |     |  
|Product revenue                                      |  |                              | 99  | %                          |  | 98   | % |      | 99  | %  |  | 98  | %
|License and collaboration revenue                    |  |                              | 1   | %                          |  | 2    | % |      | 1   | %  |  | 2   | %
|Total
 revenue                                       |  |                              | 100 | %                          |  | 100  | % |      | 100 | %  |  | 100 | %
|                                                     |  |                              |     |                            |  |      |   |      |     |    |  |     |  
|Product costs
 and operating expenses:               |  |                              |     |                            |  |      |   |      |     |    |  |     |  
|Cost of goods sold                                   |  |                              | 33  | %                          |  | 34   | % |      | 33  | %  |  | 34  | %
|Collaboration expenses                               |  |                              |    |                            |  | 1    | % |      |    |    |  | 1   | %
|Research and development                             |  |                              | 12  | %                          |  | 11   | % |      | 13  | %  |  | 11  | %
|Clinical and regulatory                              |  |                              | 5   | %                          |  | 4    | % |      | 4   | %  |  | 4   | %
|Sales and marketing                                  |  |                              | 30  | %                          |  | 31   | % |      | 31  | %  |  | 32  | %
|General and administrative                           |  |                              | 7   | %                          |  | 6    | % |      | 7   | %  |  | 7   | %
|Litigation                                           |  |                              |    |                            |  |     |   |      | (9  | %) |  |    |  
|Amortization of purchased technology and intangibles |  |                              |    |                            |  |     |   |      |    |    |  |    |  
|Total product costs and
 operating expenses          |  |                              | 87  | %                          |  | 87   | % |      | 79  | %  |  | 89  | %
|Operating income                                     |  |                              | 13  | %                          |  | 13   | % |      | 21  | %  |  | 11  | %
|Other income and expenses, net                       |  |                              |    |                            |  |     |   |      |    |    |  |    |  
|Income before income taxes                           |  |                              | 13  | %                          |  | 13   | % |      | 21  | %  |  | 11  | %
|Income taxes                                         |  |                              | 5   | %                          |  | 5    | % |      | 8   | %  |  | 4   | %
|Net income                                           |  |                              | 8   | %                          |  | 8    | % |      | 13  | %  |  | 7   | %

Three and six months
ended June 30, 2010, compared to three and six months ended June 30, 2009

Net
revenue increased 14% to $19,516,000 for the quarter ended June 30, 2010 from
$17,166,000 for the quarter ended June 30, 2009. Net revenue related to the SMARTNEEDLE and pdACCESS products we
acquired from Escalon was $847,000 for the quarter ended June 30, 2010
accounting for 36% of the overall revenue increase. The remaining new product
introductions, which include any product with no sales in the comparable period
in 2009, represented 36% of the overall increase in revenue for the quarter
ended June 30, 2010. An increase in the volume of product sales also
contributed to the increase in revenue, while product pricing did not have a
material impact on the revenue increase for the quarter ended June 30, 2009.
Approximately 86% of our net revenue was earned in the United States and 14% of
our net revenue was earned in international markets for the quarter ended June
30, 2010, while approximately 88% of our net revenue was earned in the United
States and 12% of our net revenue was earned in international markets for the
quarter ended June 30, 2009. Net revenue increased 14% to $37,705,000 for the
six months ended June 30, 2010 from $32,976,000 for the six months ended June
30, 2009. The increase in net revenue was a result of an increase in the volume
of product sales and the introduction of new products. Net revenue related to
the SMARTNEEDLE and pdACCESS
products we acquired from Escalon was $847,000 for the six months ended June
30, 2010 accounting for 18% of the overall revenue increase. The remaining new
product introductions represented 31% of the overall increase in revenue for the
six months ended June 30, 2010. Product pricing did not have a material impact
on the revenue increase for the six months ended June 30, 2010. Approximately
86% of our net revenue was earned in the United States and 14% of our net
revenue was earned in international markets for the six months ended June 30,
2010, while approximately 87% of our net revenue was earned in the United
States and 13% of our net revenue was earned in international markets for the
six months ended June 30, 2009.

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We
recognized $212,000 and $424,000 of licensing revenue during the three and six
month periods ending June 30, 2010 and 2009, respectively, as the result of our
License Agreement and Device Supply Agreement with King and our distribution
agreement with Nicolai. We also recognized $42,000 and $173,000 of
collaboration revenue during the three month periods ending June 30, 2010 and
2009, and $152,000 and $355,000 of collaboration revenue during the six month
periods ending June 30, 2010, respectively, as a result of performing clinical
and development work for King under the Device Supply Agreement.

Gross
margin across all product lines remained constant at 66% for the quarter ended
June 30, 2010, compared to 66% for the quarter ended June 30, 2009. We expect
product gross margins to be in the range of 65% to 67% for the remainder of
2010, subject to changes in our selling mix between our lower margin products
such as the Vari-Lase products and our higher margin products such as the
D-Stat Dry. Gross margin across all product lines remained constant at 66% for
the six months ended June 30, 2010 compared to 66% for the six months ended
June 30, 2009.

Research
and development expense for the second quarter of 2010 totaled $2,266,000, or 12%
of revenue, compared to $1,803,000, or 11% of revenue, for the second quarter
of 2009. Research and development expense for the six month period ending June
30, 2010 totaled $4,730,000, or 13% of revenue, compared to $3,719,000, or 11%
of revenue, for the six month period ending June 30, 2009. We expect our
continuing research and development expenses to be approximately 10% to 11% of
revenue for the remainder of 2010 as we continue to pursue additional new
products and to move our longer term development projects forward.

Clinical
and regulatory expense for the second quarter of 2010 totaled $888,000, or 5%
of revenue, compared to $767,000, or 4% of revenue, for the second quarter of
2009. Clinical and regulatory expense for the six month period ending June 30,
2010 totaled $1,595,000, or 4% of revenue, compared to $1,379,000, or 4% of
revenue, for the six month period ending June 30, 2009. Clinical and regulatory
expenses fluctuate due to the timing of clinical studies and the number of new products
coming through the regulatory system. We expect clinical and regulatory
expenses to be approximately 4% to 5% of revenue for the remainder of 2010.

Sales
and marketing expense for the second quarter of 2010 totaled $5,910,000, or 30%
of revenue, compared to $5,307,000, or 31% of revenue, for the second quarter
of 2009. Sales and marketing expense for the six month period ending June 30,
2010 totaled $11,513,000, or 31% of revenue, compared to $10,560,000, or 32% of
revenue, for the six month period ending June 30, 2009. The decline in sales
and marketing expenses as a percentage of revenue primarily resulted from
maintaining our direct sales force at between 85 and 90 full-time employees
while continuing to grow revenue. We expect to maintain the same relative size
of our direct sales force through-out 2010. As a result, we expect our sales
and marketing expenses will continue to decline as a percentage of revenue to
between 27% and 29% of revenue by the end of 2010.

General
and administrative expense for the second quarter of 2010 totaled $1,405,000,
or 7% of revenue, compared to $1,104,000, or 6% of revenue, for the second
quarter of 2009. General and administrative expense for the six month period
ending June 30, 2010 totaled $2,712,000, or 7% of revenue, compared to
$2,223,000, or 7% of revenue, for the six month period ending June 30, 2009.
General and administrative expenses have remained relatively flat as percent of
total revenue. We expect general and administrative expenses to be
approximately 6% to 7% of revenue for the remainder of 2010.

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Litigation
income for the six months ended June 30, 2010 was $3,529,000, or 9% of revenue.
The litigation income resulted from an award of damages the Company received in
the first quarter of 2010 in the Marine Polymer Technologies, Inc. litigation.
For a complete discussion of litigation matters, see Note 8 to the Unaudited
Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q.

Amortization
of purchased technology and other intangibles was $59,000 for the three and six
months ended June 30, 2010. The amortization resulted from our purchase of the
Escalon SMARTNEEDLE and pdACCESS
products in April 2010. As part of the asset purchase, we allocated $3,250,000
to purchased technology and other intangibles that are being amortized over a
period of 9  10 years.

Interest
income decreased to $10,000 and $20,000 for the second quarter and six month
period ending June 30, 2010 compared to $14,000 and $37,000 for the second
quarter and six month period ending June 30, 2009. The decrease in interest
income was primarily the result of lower interest rates being paid on our
deposit funds held at the bank.

Interest
expense decreased to $5,000 and $10,000 for the second quarter and six month
period ending June 30, 2010 compared to $11,000 and $20,000 for the second
quarter and six month period ending June 30, 2009. The decrease in interest
expense was the result of timing of banking charges as we switched banks in the
first quarter of 2010.

Foreign
exchange loss was $35,000 for the quarter ending June 30, 2010 compared to a
foreign exchange gain of $7,000 for the quarter ending June 30, 2009. Foreign
exchange loss was $58,000 for the six months ended June 30, 2010 compared to
$5,000 for the six months ended June 30, 2009. Sales to one of our distributors
are denominated in Euros and we purchase a small number of inventory items at
prices denominated in Euros. As a result, we are exposed to foreign exchange
movements during the time between the shipment of the product and payment. The
increase in foreign exchange losses was the result of the weakening of the Euro
against the U.S. Dollar in the second quarter of 2010.

Income
tax expense increased to $931,000 and $3,027,000 for the three month and six
month periods ending June 30, 2010 on income before tax of $2,406,000 and
$7,968,000 resulting in an effective income tax rate of 38%. The difference
between the effective tax rate of 38% and the U.S. federal statutory income tax
rate of 34% was due mainly to the impact of state income taxes. For the three
and six months ended June 30, 2009, income tax expense was $871,000 and
$1,448,000 on income before tax of $2,257,000 and $3,772,000, resulting in an
effective income tax rate of 38%.

Liquidity and Capital Resources

Our
cash and cash equivalents totaled $18,227,000 at June 30, 2010 compared to
$17,794,000 in cash and cash equivalents at December 31, 2009, an increase of
$433,000. Our cash equivalents are invested in a money market fund invested in
all types of high quality, short-term money market instruments denominated in
U.S. dollars such as debt instruments guaranteed by the governments of the
United States, Western Europe, Australia, Japan and Canada, high quality
corporate issuers and bank obligations. The money market funds assets are
rated in the highest short-term category by nationally recognized rating
agencies, such as Moodys or Standard & Poors.

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Cash
provided by operations. We generated $7,010,000 of
cash from operations for the six months ended June 30, 2010. The cash generated
in the six months ended June 30, 2010 primarily resulted from our income before
taxes of $7,968,000 since essentially all of our income taxes are offset by our
deferred tax assets. During the first half of 2010 we increased the safety
stock levels for a number of our products, which increased our inventory by
$3,329,000 from December 31, 2009. At June 30, 2010 we had reached our desired
safety stock levels, and therefore we expect our inventory to increase at our
sales growth rate for the remainder of 2010.

Cash
used for investing activities.We used $6,307,000 of
cash in investing activities for the six months ended June 30, 2010. We
incurred capital expenditures of $1,307,000 relating to purchasing additional
manufacturing equipment, expanding our clean room manufacturing area and
purchasing additional research and development equipment. We also used
$5,000,000 of cash in the purchase of the SMARTNEEDLE
and pdACCESS products from Escalon.

Cash
provided by financing activities.We used $270,000 of
cash in financing activities for the six months ended June 30, 2010. We used
$1,153,000 of cash to repurchase 123,309 common shares on the open market under
our stock repurchase plan, and we used $387,000 of cash to repurchase 48,212
shares that vested under outstanding restricted stock awards to satisfy income
tax withholding obligations These purchases were offset by our receipt of
$426,000 for purchases of common stock pursuant to our Employee Stock Purchase
Plan and $844,000 upon the exercise of outstanding stock options.

We
have a $10 million revolving line of credit with US Bank, which has a 12-month
term, bears interest at the rate of LIBOR plus 1.60% and is secured by a first
security interest on all of our assets. As of June 30, 2010, we were in
compliance with the bank covenant and we had no outstanding balance on the
revolving line of credit with an availability of $10 million.

We
currently anticipate that we will experience positive cash flow from our normal
operating activities for the foreseeable future. We currently believe that our
working capital of $37.4 million at June 30, 2010 will be sufficient to meet
all of our operating and capital requirements for the foreseeable future.
However, our actual liquidity and capital requirements will depend upon
numerous unpredictable factors, including the amount of revenues from sales of
our existing and new products; the cost of maintaining, enforcing and defending
patents and other intellectual property rights; competing technological and
market developments; developments related to regulatory and third party
reimbursement matters; and other factors.

Off-Balance Sheet Arrangements

We
did not have any off-balance sheet arrangements as of June 30, 2010.

Contractual Obligations

The
following table summarizes our contractual cash commitments as of June 30,
2010:

|                           |  |                        |           |                   |   |             |  |             |           |                    |   |           |  |   |         | 
|-------------------------- |  | ---------------------- | --------- | ----------------- | - | ----------- |  | ----------- | --------- | ------------------ | - | --------- |  | - | ------- | 
|                           |  | Payments Due by Period |          
|Contractual
 Obligations   |  | Total                  |           | Less than
 1 year |   | 1 - 3 years |  | 3 - 5 years |           | More than
 5 years |  
|Facility
 operating leases |  | $                      | 4,306,000 |                   | $ | 785,000     |  | $           | 1,628,000 |                    | $ | 1,683,000 |  | $ | 210,000 | 

We
do not have any other significant cash commitments related to supply
agreements, nor do we have any significant commitments for capital
expenditures.

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Critical Accounting Policies

Managements
Discussion and Analysis of Financial Condition and Results of Operations
addresses our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States for interim
financial information. The preparation of our financial statements requires
that we make estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. On an on-going basis, we evaluate
these estimates and judgments. We base our estimates and judgments on
historical experience and on various other factors that are believed to be
reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying value of assets and liabilities that are
not readily apparent from other sources. Actual results may differ from these
estimates under different assumptions or conditions.

The
material accounting policies that we believe are most critical to an investors
understanding of our financial results and condition and which require complex
management judgment are discussed in our 2009 Form 10-K under the caption
Critical Accounting Policies.

Cautionary Statement Pursuant to the Private
Securities Litigation Reform Act of 1995

The
Private Securities Litigation Reform Act of 1995 (the Act) provides a safe
harbor for forward-looking statements to encourage companies to provide
prospective information about their business, so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those discussed in the statement. We desire to take
advantage of the safe harbor provisions with respect to any forward-looking
statements we may make in this filing, other filings with the Securities and
Exchange Commission and any public oral statements or written releases. The
words or phrases will likely, is expected, will continue, is
anticipated, believe, estimate, projected, forecast, or similar
expressions are intended to identify forward-looking statements within the
meaning of the Act. Forward-looking statements such as these are based on
managements current expectations as of the date of this report but involve
risks, uncertainties and other factors which may cause actual results to differ
materially from those contemplated by such forward-looking statements. We
caution readers not to place undue reliance on any such forward-looking
statements, which speak only as of the date made. In accordance with the Act,
we identify the following important general factors which, if altered from the
current status, could cause our actual results to differ from those described
in any forward-looking statements: risks associated with defense of patent
infringement lawsuits, adoption of our new products, limited profitability,
exposure to possible product liability claims, the development of new products
by others, dependence on third party distributors in international markets,
doing business in international markets, the availability of third party
reimbursement, actions by the FDA related to our products, the loss of key
vendors, and those factors set forth under the heading Risk Factors in Item
1A of Part I of our Annual Report on Form 10-K for the year ended December 31,
2009. This list is not exhaustive, and we may supplement this list in any future
filing with the Securities and Exchange Commission or in connection with the
making of any specific forward-looking statement. We undertake no obligation to
and do not intend to revise or update publicly any forward-looking statement
for any reason.

|         |                                                            
|-------- | -----------------------------------------------------------
|Item
 3. | Quantitative and Qualitative
 Disclosures about Market Risk

Financial
instruments that potentially subject us to concentrations of credit risk
consist primarily of cash and cash equivalents and accounts receivables. We
maintain our accounts for cash and cash equivalents principally at one major
bank and one investment firm in the United States. We have a formal written
investment policy that limits our investments to investments in issuers
evaluated as creditworthy. We have not experienced any losses on our deposits
of our cash and cash equivalents.

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With
respect to accounts receivable, we perform credit evaluations of our customers
and do not require collateral. There have been no material losses on accounts
receivables.

In
the United States we sell our products directly to hospitals and clinics. In
international markets, we sell our products to independent distributors who, in
turn, sell to hospitals. Sales to independent distributors are denominated in
United States dollars, with the exception of Germany, where sales are
denominated in Euros.

We
distribute certain products on behalf of certain U.S. and international
manufacturers. We pay for all distributed products in United States dollars, with
the exception of one distributor located in Europe, where purchases are
denominated in Euros.

We
do not believe our operations are currently subject to significant market risks
for interest rates, foreign currency exchange rates, commodity prices or other
relevant market price risks of a material nature. A change of 0.1 in the Euro
exchange rate would result in an increase or decrease of approximately $20,000
in the amount of United States dollars we receive in payment on accounts
receivable from our German distributor Nicolai, GmbH. In addition, we have made
advances to a European supplier of one of our distributed products, Zerusa
Ltd., for future product deliveries. A change of 0.1 in the Euro exchange rate
would result in an increase or decrease of approximately $16,000 in the amount
of United States dollars we recognize as exchange rate gains or losses from
Zerusa. Under our current policies, we do not use foreign currency derivative
instruments to manage exposure to fluctuations in the Euro exchange rate.

We
currently have no indebtedness, but if we were to borrow amounts from our
revolving credit line, we would be exposed to changes in interest rates.
Advances under our revolving credit line bear interest at an annual rate indexed
to LIBOR. We will thus be exposed to interest rate risk with respect to amounts
outstanding under the line of credit to the extent that interest rates rise. As
we had no amounts outstanding on the line of credit at June 30, 2010, we have
no exposure to interest rate changes on this credit facility. Under our current
policies, we do not use interest rate derivative instruments to manage exposure
to interest rate changes. Additionally, we will be exposed to declines in the
interest rates paid on deposited funds. A 0.1% decline in the current market
interest rates paid on deposits would result in interest income being reduced
by approximately $18,000 on an annual basis.

|         |                        
|-------- | -----------------------
|Item
 4. | Controls and Procedures

Evaluation of disclosure controls and
procedures.

Under
the supervision and with the participation of our management, including our
Chief Executive Officer and Chief Financial Officer, we evaluated the
effectiveness of the design and operation of our disclosure controls and
procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon
that evaluation, the Chief Executive Officer and Chief Financial Officer
concluded that, as of the end of the period covered by this report, our
disclosure controls and procedures were effective.

Changes in internal control over financial
reporting.

During
the fiscal quarter ended June 30, 2010, there has been no change in our
internal control over financial reporting (as defined in Rule 13a-15(f) under
the Exchange Act) that has materially affected, or is reasonably likely to
materially affect, our internal control over financial reporting.

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Table of Contents

PART
II. OTHER INFORMATION

|         |                  
|-------- | -----------------
|Item
 1. | Legal Proceedings

The
legal proceedings for the Marine Polymer Technologies, Inc. litigation and
AngioDynamics, Inc. litigation as described in Note 9 to the Unaudited
Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q is
incorporated into this Item 1 of Part II by reference.

From
time to time, we are involved in additional legal proceedings arising in the
normal course of business. As of the date of this report we are not a party to
any legal proceeding not described in this section in which an adverse outcome
would reasonably be expected to have a material adverse effect on our results
of operations or financial condition.

|         |             
|-------- | ------------
|Item 1A. | Risk Factors

Item
1A, (Risk Factors) of our most recently filed Form 10-K sets forth
information relating to important risks and uncertainties that could materially
adversely affect our business, financial condition or operating results. There
have been no material changes from the Risk Factors described in our annual
report on Form 10-K; however, those Risk Factors continue to be relevant to an
understanding of our business, financial condition and operating results and,
accordingly, you should review and consider such Risk Factors in making any
investment decision with respect to our securities. An investment in our
securities continues to involve a high degree of risk.

|        |                                                             
|------- | ------------------------------------------------------------
|Item 2. | Unregistered Sales of Equity
 Securities and Use of Proceeds

Purchase
of Equity Securities by the Issuer and Affiliated Purchasers:

|                    |  |                                    |        |                                |   |                                                                                           |  |                                                                                   |        |  |  |         | 
|------------------- |  | ---------------------------------- | ------ | ------------------------------ | - | ----------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------- | ------ |  |  | ------- | 
|Period              |  | Total Number
 of Shares
 Purchased |        | Average
 Price Paid
 per Share |   | Total Number of
 Shares Purchased
 as Part of a Publicly
 Announced Plans or
 Programs(1) |  | Maximum Number of
 Shares that May Yet be
 Purchased Under the
 Plans or Programs |       
|April 1 
 30, 2010 |  |                                    | 38,277 |                                | $ | 9.63                                                                                      |  |                                                                                   | 38,277 |  |  | 895,616 | 
|May 1  31,
 2010   |  |                                    | 18,925 |                                | $ | 10.04                                                                                     |  |                                                                                   | 18,925 |  |  | 876,691 | 
|June 1  30,
 2010  |  |                                    |       |                                |   |                                                                                          |  |                                                                                   |       |  |  | 876,691 | 

| |                                                                                                                                                                                                                                                                                                                        
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) On
 January 29, 2010, our Board of Directors approved a Common Stock Repurchase
 Plan (the Repurchase Plan), whereby we have the option to repurchase up to
 a maximum of 1,000,000 shares of our common stock on the open market at the
 current market price. The Repurchase Plan expires on December 31, 2010.

|        |                                
|------- | -------------------------------
|Item 3. | Defaults Upon Senior Securities

None.

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|         |                       
|-------- | ----------------------
|Item
 4. | (Removed and Reserved)
|         |                       
|Item
 5. | Other Information     
|         |                       
|None.   
|         |                       
|Item
 6. | Exhibits              

|                |  |                                                                                                                                                                                                     | 
|--------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Exhibit
 Number |  | Description                                                                                                                                                                                         | 
|3.1             |  | Amended and
 Restated Articles of Incorporation of Vascular Solutions, Inc. (incorporated
 by reference to Exhibit 3.1 to Vascular Solutions Form 10-Q for the quarter
 ended September 30, 2000).
|3.2             |  | Amended and
 Restated Bylaws of Vascular Solutions, Inc. (incorporated by reference to
 Exhibit 3.1 of Vascular Solutions Form 8-K dated October 19, 2007).                                       
|4.1             |  | Specimen of
 Common Stock certificate (incorporated by reference to Exhibit 4.1 of
 Vascular Solutions Registration Statement on Form S-1 (File No. 333-84089)).                                  
|10.1            |  | Asset
 Purchase Agreement dated April 30, 2010 by and between Vascular Solutions and
 Escalon Vascular Access, Inc.                                                                                
|10.2            |  | Asset
 Purchase Agreement dated April 30, 2010 by and between Vascular Solutions and
 Escalon Vascular IP Holdings, Inc.                                                                           
|10.3            |  | Manufacturing
 and Supply Agreement dated April 30, 2010 by and between Vascular Solutions
 and Escalon Vascular Access, Inc.                                                                      
|10.4            |  | Guarantee
 dated April 30, 2010, delivered by Escalon Medical Corp. for the benefit of
 Vascular Solutions, Inc.                                                                                   
|31.1            |  | Certification
 of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act
 of 2002.                                                                                              
|31.2            |  | Certification
 of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act
 of 2002.                                                                                              
|32.1            |  | Certification
 of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act
 of 2002.                                                                                              
|32.2            |  | Certification
 of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act
 of 2002.                                                                                              

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SIGNATURES

Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

|                     |                           |     |                                       | 
|-------------------- | ------------------------- | --- | ------------------------------------- | 
|                     | VASCULAR
 SOLUTIONS, INC.
|                     |                           |     |                                      
|Date: July
 22, 2010 |                           | By: | /s/ Howard
 Root                      | 
|                     |                           |     | Howard Root                          
|                     |                           |     | Chief
 Executive Officer and Director
|                     |                           |     | (principal executive officer)        
|                     |                           |     |                                      
|                     |                           | By: | /s/ James
 Hennen                     | 
|                     |                           |     | James Hennen                         
|                     |                           |     | Senior Vice
 President of Finance and
|                     |                           |     | Chief
 Financial Officer             
|                     |                           |     | (principal financial officer)        
|                     |                           |     |                                      
|                     |                           | By: | /s/ Timothy
 Slayton                  | 
|                     |                           |     | Timothy
 Slayton                     
|                     |                           |     | Controller                           
|                     |                           |     | (principal accounting officer)       

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